India's Rafale Deal Remains At An Impasse

An accord India and France signed on 25 January in New Delhi for 36 Dassault Rafale fighters for the Indian Air Force (IAF) although initially declared an inter-governmental agreement (IGA) is now being described by Indian officials as a memorandum of understanding (MoU), preparatory to a more binding IGA.

"What was signed was an MoU and when the financial part of it [the deal] is settled, then obviously the IGA in its entirety will be concluded," S Jaishankar, the most senior civil servant in India's foreign ministry, has told reporters.

His clarification followed Indian prime minister Narendra Modi's statement that an IGA for the Rafales "has been completed, and now only a few financial issues remain" at a joint press conference with French president François Hollande in Delhi.

The French president, whose three-day Delhi visit concluded on 26 January, said the deal was a "decisive step" forward and all outstanding financial matters would be resolved in a "couple of days".

Indian Ministry of Defence (MoD) officials said that an MoU was simply an expression of intent to buy the Rafales, whereas an IGA is a more explicit document outlining the proposed deal but without providing contractual and price details. An IGA, however, cannot be signed unless the contract price has broadly been agreed upon, officials told IHS Jane's .

The Rafale deal, worth around USD9 billion, was to have been the centrepiece of Hollande's visit to India, where he was the chief guest at the annual showcase Republic Day military parade in Delhi on 26 January. A French military contingent also joined the parade on Delhi's main boulevard in the first such participation by any foreign country.

Official sources said ongoing Rafale price consultations were constrained by India's Contract Negotiation Committee (CNC) insisting that the fighters cost less than the previous Congress Party-led federal coalition would have paid for them

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